BRADLEY S STOUT V KELLY E STOUT
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
BRADLEY S. STOUT,
UNPUBLISHED
January 25, 2011
Plaintiff-Appellant,
v
KELLY E. STOUT a/k/a KELLY E. SIDDIQUI,
No. 293396
Oakland Circuit Court
LC No. 1999-624216-DM
Defendant-Appellee.
Before: WHITBECK, P.J., and ZAHRA and FORT HOOD, JJ.
PER CURIAM.
Plaintiff appeals by leave granted the trial court’s opinion and order regarding his motion
to modify child support. We affirm in part, reverse in part, and remand the case to the trial court
for a recalculation of plaintiff’s support obligation consistent with this opinion.
Plaintiff and defendant divorced in 2001. The judge awarded the parties joint legal
custody of their two minor children, entrusted defendant with the children’s physical care and
custody, and set forth plaintiff’s child support obligation. Per the terms of the consent judgment
of divorce, plaintiff agreed to waive application of the Shared Economic Responsibility Formula
(“SERF”). Plaintiff’s support obligation has been adjusted over the years based on changes in
the parties’ respective incomes and the births of children with their current spouses. The instant
appeal concerns plaintiff’s most recent motion to modify child support, and the trial court’s
opinion and order regarding that motion.
In his first issue on appeal, plaintiff argues that the trial court erred in enforcing his
agreement to waive application of SERF and contends that it should have applied the Parental
Time Offset Formula set forth in the 2008 Michigan Child Support Formula Manual (“MCSF”)
to calculate his support obligation. We disagree. Whether a trial court may depart from the child
support formula for a given reason is a question of law that we review de novo. Burba v Burba,
461 Mich 637, 647; 610 NW2d 873 (2000). A judgment of divorce entered as a result of a
settlement agreement between the parties represents a contract. Holmes v Holmes, 281 Mich
App 575, 587; 760 NW2d 300 (2008). If unambiguous, the contract interpretation presents a
question of law. Id. We review questions involving contract interpretation de novo. Manuel v
Gill, 481 Mich 637, 643; 753 NW2d 48 (2008).
Plaintiff first argues that his agreement to waive application of SERF contained in the
parties’ divorce judgment does not set contain a statement that adhering to the child support
-1-
formula would elicit an unjust or inappropriate result, as statutorily required. Therefore, plaintiff
argues, the waiver is invalid. Pursuant to MCL 552.605(2)(d), a court may deviate from the
child support formula if it states in writing or on the record “[t]he reasons why application of the
child support formula would be unjust or inappropriate in the case.” See also Holmes, 281 Mich
at 588. A court may enforce an agreement between parties to deviate from the child support
formula, as here, only if the requirements of MCL 552.605(2) are met, MCL 552.605(3). Id. at
588-589. Here, other than stating in the consent judgment of divorce that plaintiff agreed to
waive application of SERF, the court failed to state on the record, explicitly, that plaintiff’s
agreement provided a reason why adhering to the formula would be unjust or inappropriate. For
several reasons, however, this is not a basis for finding the waiver unenforceable.
This Court, in Holmes, 281 Mich App at 591, noted that a circuit court has the authority
to exercise its discretion in enforcing voluntary agreements to pay additional child support
contained in divorce judgments:
[W]here the parties entered into an agreement that was incorporated by the court
in its judgment, and the parties concede they knew [the terms] at the time [], it
would be an invitation to chaos to hold that such provision was not enforceable. It
would permit parties to divorce actions to play fast and loose with the court and
with the other parties to the action by entering into agreements which they had no
intention of performing. [Quoting Ovaitt v Ovaitt, 43 Mich App 628, 638; 204
NW2d 753 (1972).]
Further, it would be inequitable to allow plaintiff to challenge the waiver now because he
failed to challenge the waiver’s validity in a previous matter regarding his child support
obligation. The Michigan Supreme Court, in Paschke v Retool Industries, 445 Mich 502, 509510; 519 NW2d 441 (1994), stated that courts use the doctrine of judicial estoppel as a tool to
impede parties from playing “fast and loose” with the legal system:
[A] party who has successfully and unequivocally asserted a position in a prior
proceeding is estopped from asserting an inconsistent position in a subsequent
proceeding. … [T]he mere assertion of inconsistent positions is not sufficient to
invoke estoppel; rather, there must be some indication that the court in the earlier
proceeding accepted that party’s position as true. Further, in order for the doctrine
of judicial estoppel to apply, the claims must be wholly inconsistent. [Internal
citations, quotations, and emphasis omitted.]
Here, plaintiff brought a motion to reduce child support in 2002, wherein he did not challenge
the validity of the waiver. Rather, plaintiff took the position that, pursuant to his agreement to
waive application of SERF, 127 overnights should be used to calculate his support obligation,
even though the actual number of overnights exceeded 127. The court accepted plaintiff’s
position as true and calculated his support obligation accordingly. Wholly inconsistent with that
position, plaintiff now argues that the actual number of overnights should be used to calculate his
support obligation, rather than 127 overnights as agreed. This is an attempt to play fast and loose
with the legal system, which we will not permit.
-2-
Moreover, plaintiff cannot challenge the child support calculation contained in the
consent judgment of divorce because plaintiff’s support obligation has been modified multiple
times in the nine years since its issuance. A challenge to a support obligation no longer in effect
is moot. Plaintiff challenges the consent judgment of divorce for failure to satisfy MCL
552.605(2), but the support obligation contained therein is no longer in effect. Indeed, each time
a court modified plaintiff’s support obligation, it deviated from the child support formula
pursuant to plaintiff’s waiver, thereby triggering the statutory requirement to provide a reason
why adhering to the formula would be unjust or inappropriate. Yet plaintiff does not challenge
the opinion and order that is the subject of this appeal, which sets forth plaintiff’s current child
support obligation, on the ground that that trial court failed to state a reason on the record
pursuant to MCL 552.605(2). Even had plaintiff brought such challenge, review of the record
reveals that the trial court clearly fulfilled its statutory obligation by acknowledging the parties’
contractual settlement agreement and the equities of the situation.
Similarly, plaintiff’s assertion that none of the eighteen deviation factors apply to this
case is without merit. The final deviation factor provides that strict application of the child
support formula may be found unjust or inappropriate based on “[a]ny other factor the court
deems relevant to the best interests of a child.” 2008 MCSF § 1.04(E)(18). The court’s decision
to enforce the parties’ contractual agreement clearly falls within this catchall factor.
Plaintiff next argues that the waiver is unenforceable for lack of consideration and that
the trial court relied on facts not in evidence to conclude that plaintiff waived application of
SERF in exchange for no spousal support. We disagree. As a general matter, courts will not
inquire into the adequacy of consideration. GMC v Dep’t of Treasury, 466 Mich 231, 239; 644
NW2d 734 (2002). Consideration requires a bargained for exchange, meaning a promise that
provides a benefit to one side or a detriment to the other. Id. at 238-239. Here, viewing the
consent judgment of divorce, it is clear that each party gave up certain rights in exchange for
promises on the part of the other. In addition to setting forth plaintiff’s child support obligation,
the judgment provided that there shall be no spousal support, that the parties shall have joint
custody of their two minor children, and that plaintiff shall be allotted parenting time. Further,
plaintiff testified that he agreed to waive application of SERF because he wanted to make sure
that defendant had enough money to care for their children. In other words, it was important to
plaintiff—i.e., a benefit to him—that their children received proper care. Thus, adequate
consideration supported the waiver, and the trial court did not err in enforcing the parties’
agreement as written.
Plaintiff next argues that, because the 2008 amendments to the MCSF eliminated SERF,
the trial court should have applied SERF’s successor, the Parental Time Offset Formula. We
disagree. Before 2008, SERF applied where each parent had at least 128 overnights annually,
and resulted in a lower child support obligation, with the understanding that “as parents spend
more time with their children they directly contribute toward a greater share of all expenses.”
2004 MCSF § 3.05. Now, under the Parental Time Offset Formula, “[p]resuming that as parents
spend more time with their children they will directly contribute a greater share of the children’s
expenses, a base support obligation needs to offset some of the costs and savings associated with
time spent with each parent.” 2008 MCSF § 3.03(A)(1). Accordingly, a parental time offset that
is dependent on the actual number of overnights should be applied to adjust the base support
obligation. 2008 MCSF § 3.03(C).
-3-
Here, plaintiff waived application of SERF with the understanding that 127 overnights
were to be used to calculate his support obligation, even though his actual number of overnights
exceeded this figure. In essence, plaintiff agreed that his support obligation would not be based
on actual number of overnights. Logically, then, the trial court construed plaintiff’s agreement to
extend to waive application of the Parental Time Offset Formula, presumably because it believed
that this was most consistent with the parties’ intent. Indeed, applying the Parental Time Offset
Formula would run directly counter to the parties’ intent that plaintiff’s child support obligation
not depend on actual number of overnights.
Plaintiff, however, argues that the Parental Time Offset Formula should apply despite the
waiver because, according to the 2008 MCSF Manual, “[a]n offset for parental time generally
applies to every support determination whether in an initial determination or subsequent
modification, whether or not previously given.” 2008 MCSF § 3.03(B). We disagree. As this
Court stated in Holmes, 281 Mich App at 592, “because the child support guidelines set forth a
parent’s minimum support obligation, a voluntarily assumed obligation to pay an amount in
excess of the minimum is not inherently objectionable.” Accordingly, “a contract enhancing a
parent’s child support obligation should be enforced, absent a compelling reason to forbear.” Id.
This principle is no less true today than when this Court decided Holmes. In other words,
contrary to plaintiff’s position, it makes no difference that this Court decided Holmes before the
2008 amendments went into effect. The insight Holmes provides with respect to agreements to
overpay child support remains applicable regardless of what formula is in place to calculate child
support absent such agreement.
We also disagree with plaintiff’s argument that there exists a compelling reason to
forbear enforcement of his agreement to overpay child support. Plaintiff points out that his
income has decreased, he has no money set aside for retirement, and he has accumulated
substantial debt. Even considering this information, however, plaintiff has not established a
compelling reason to forbear the parties’ agreement. Having found that plaintiff established a
change in circumstances, the trial court took plaintiff’s decreased income and defendant’s
increased income into account when it recalculated plaintiff’s support obligation. Paying the
reduced amount that the court ordered would not cause plaintiff such hardship that this Court
must forbear plaintiff’s agreement to waive application of the child support formula.
In his second issue on appeal, plaintiff argues that the trial court erred in adding amounts
listed as deductions on his tax return for motor vehicle, insurance, and telephone expenses to his
income for the purpose of calculating child support. We agree in part. “Whether a trial court
properly operated within the statutory framework relative to child support calculations and any
deviation from the child support formula are reviewed de novo as questions of law.” Peterson v
Peterson, 272 Mich App 511, 516; 727 NW2d 393 (2006).
Relevant portions of the 2008 MCSF Manual are as follows:
2.01(A) The term “net income” means all income minus the deductions and
adjustments permitted by this manual. A parent’s “net income” used to calculate
support will not be the same as that person’s take home pay, net taxable income,
or similar terms that describe income for other purposes.
-4-
***
2.01(E) Do not consider expenses consistent with a parent’s business or
occupation as part of a parent’s income. Unless otherwise counted, a parent’s
income includes the following expenses if they are inconsistent with the nature of
the parent’s business or occupation:
***
(3) Home office expenses, including rent, hazard insurance, utilities,
repairs, and maintenance.
***
(5) Travel expense reimbursements, except where such expenses are
inherent in the nature of the business or occupation (e.g., a traveling
salesperson), and do not exceed the standard rates allowed by the State of
Michigan for employee travel.
(6) Personal automobile repair and maintenance expenses.
Plaintiff first argues that the cost of insurance constituted an expense consistent with his
business or occupation, which should not be included in his income for the purpose of
determining child support pursuant to MCSF § 2.01(E). Plaintiff testified that the insurance at
issue was for legal malpractice and workers’ compensation. We agree with plaintiff that these
expenses are consistent with running a law firm and that the trial court erred in adding this
deduction from his tax return to his income for the purpose of determining his child support
obligation.
Plaintiff also challenges the inclusion of one half of plaintiff’s telephone expenses which
is listed as a deduction on plaintiff’s tax return. It appears that plaintiff uses the same cell phone
for business and personal use. It also appears that the trial court, without any proofs from
plaintiff establishing the percentage of telephone use that could fairly be attributed to his
business, took a reasonable approach by splitting the difference and including only half of
plaintiff’s telephone expense in his income for the purpose of calculating his support obligation.
Plaintiff has failed to produce any proof, such as a cell phone bill, to rebut the trial court’s
reasonable division. Thus, in this regard, the trial court did not err.
Plaintiff next challenges the trial court’s decision to include in his income for the purpose
of determining his support obligation certain travel expenses related to his business, listed as a
deduction on his tax return. Similar to plaintiff’s legal malpractice and workers’ compensation
expenses, business travel is consistent with plaintiff’s occupation under MCSF § 2.01(E), and the
trial court erred in including this expense in his income. Traveling to and from court,
depositions, and meetings is “inherent in the nature of [plaintiff’s] business.” MCSF §
2.01(E)(5).
Finally, plaintiff argues that the trial court erred in including in his income for the
purpose of calculating child support an amount of $6,184 for “shareholder insurance,” which
-5-
plaintiff does not dispute constituted the cost of his personal health insurance. According to
plaintiff, the court mistakenly assumed that plaintiff’s income reflected a deduction for this
amount, when it did not, and added the amount to plaintiff’s income for the purpose of
calculating his support obligation, with the result that plaintiff’s income used to calculate his
support obligation included the amount twice. According to an affidavit prepared by plaintiff’s
accountant, an amount of $6,184 was never deducted from gross revenues on plaintiff’s tax
return, and his $61,140 income in 2008 does not reflect a deduction for the $6,184 “shareholder
insurance” expense. Yet, in the court’s opinion and order, it stated that it was including certain
deductions in plaintiff’s income. Among these purported deductions was $6,184 for
“shareholder insurance.” Because plaintiff’s tax return does not reflect an actual deduction for
“shareholder insurance,” however, the court erred in including this amount in plaintiff’s income
under MCSF § 2.01(E).
We affirm the trial court’s decision to enforce plaintiff’s agreement to waive the child
support formula. With regard to the inclusion of certain deductions in plaintiff’s income for the
purpose of calculating his support obligation, however, we reverse and remand to the trial court
for a recalculation consistent with this opinion. We do not retain jurisdiction.
/s/ William C. Whitbeck
/s/ Brian K. Zahra
/s/ Karen M. Fort Hood
-6-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.